DP12377 Unity in Diversity? How Intergroup Contact Can Foster Nation Building

Author(s): Samuel Bazzi, Arya Gaduh, Alexander Rothenberg, Maisy Wong
Publication Date: October 2017
Date Revised: March 2019
Keyword(s): Cultural change, diversity, identity, Language, migration, Nation building
JEL(s): D02, D71, J15, O15, R23
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12377

We use a population resettlement program in Indonesia to identify long-run effects of intergroup contact on national integration. In the 1980s, the government relocated two million ethnically diverse migrants into hundreds of new communities. We find greater integration in fractionalized communities with many small groups, as measured by national language use at home, intermarriage, and children's name choices. However, in polarized communities with a few large groups, ethnic attachment increases and integration declines. Residential segregation dampens these effects. Social capital, public goods, and ethnic conflict follow similar patterns. Overall, our findings highlight the importance of localized contact in shaping identity.